A STUDY TO COMPARE BRAND IMAGE OF PAYTM

WITH GOOGLE PAY AND PHONE PE

A Project
Submitted in partial fulfillment of the
requirements for the award of the Degree of

MASTERS OF BUSINESS ADMINISTRATION

By
RINI GAUTAM MBA/10090/19

DEPARTMENT OF MANAGEMENT
BIRLA INSTITUTE OF TECHNOLOGY, MESRA, RANCHI
2019-21

Q. A leading mobile wallet company operating in India is

conducting a research to compare the image of its
brand with two of its competitors. Conduct a brief
Exploratory research and construct a Semantic
differential scale for the conclusive research to be
conducted for the study.
1|Page
 CONTENTS

1 COMPANY PROFILE 3
2 COMPETITORS 4
3 LITERATURE REVIEW 5-11
4 OBJECTIVE & RESEARCH DESIGN 12
5 INSIGHTS OF EXPLORATORY WORK 13
6 QUESTIONNAIRE 14-15

2|Page
 COMPANY PROFILE (PAY TM)
Paytm ("Pay-T-M", pronounced similar to ATM) is an Indian e-commerce payment
system and financial technology company, based out of Noida, India.
Paytm is available in 11 Indian languages and offers online use-cases like mobile
recharges, utility bill payments, travel, movies, and events bookings as well as in-
store payments at grocery stores, fruits and vegetable shops, restaurants,
parking, tolls, pharmacies and educational institutions with the Paytm QR code.
California based PayPal had filed a case against Paytm in the Indian trademark
office for using a logo similar to its own on 18 November 2016. As of January
2018, Paytm is valued at $10 billion and it is planning to launch its initial public
offering (IPO) in 2022.
As per the company, over 7 million merchants across India use this QR code to
accept payments directly into their bank account. The company also uses
advertisements and paid promotional content to generate revenues.

 SWOT ANALYSIS

STRENGTHS WEAKNESS

 Paytm has got extremely high  Audience in India is less the

brand awareness across India savvy as majority consider cash
 Offers multiple cashback options as primary currency
to customers  Paytm has diversified too much
  Strong investments from Ratan
Tata, Alibaba group etc have
strengthened Paytm's position
  Word of mouth of cashless
OPPORTUNITY THREATS

 Paytm can cater to a larger  Banks offering ewallets on their

audience with some offline saving accounts
presence as well  Security and privacy of user is a
concern for Paytm
 Paytm can educated customers
on accepting cashless
transactions and online payments
which would in turn boost their

3|Page
 COMPETITOR 1 ( PHONE PE)

PhonePe Private Limited or PhonePe is an Indian e-commerce payment

system and digital wallet company headquartered in Bangalore, India.
It was founded in December 2015, by Sameer Nigam and Rahul Chari. PhonePe
app went live in August 2016 and was the first payment app built on Unified
Payments Interface (UPI)
The PhonePe app is available in over 11 Indian languages. Using PhonePe, users
can send and receive money, DTH, recharge mobile, data cards, make utility
payments, buy gold and shop online and offline. In addition PhonePe also allows
users to book Ola rides, pay for Redbus tickets, order food on Freshmenu, eaf, fit
and avail Goibibo Flight and Hotel services through microapps on its platform.
PhonePe is accepted as a payment option across 5 million offline and online
merchant outlets covering food, travel, groceries, movie tickets etc. The app
crossed 100 million user mark in June 2018 and also crossed 5 billion transactions
in December 2019.

COMPETITOR 2 (GOOGLE PAY)

Google Pay (stylized as G Pay; formerly Pay with Google and Android Pay) is
a digital wallet platform and online payment system developed by Google to
power in-app and tap-to-pay purchases on mobile devices, enabling users to
make payments with Android phones, tablets or watches.
As of January 8, 2018, the old Android Pay and Google Wallet have unified into a
single pay system called Google Pay. Android Pay was rebranded and renamed as
Google Pay. It also took over the branding of Google Chrome's autofill feature.
Google Pay adopts the features of both Android Pay and Google Wallet through
its in-store, peer-to-peer, and online payments services.
The rebranded service provided a new API that allows merchants to add the
payment service to websites, apps, Stripe, Braintree, and Google Assistant The
service allows users to use the payment cards they have on file with Google Play.
The Google Pay app also added support for boarding passes and event tickets in
May 2018.

4|Page
 LITERATURE REVIEW
Article 1
With over 100 million users a year ago, PayTM was already ahead of its digital
payment competitors before the Nov. 2016 demonetization of high value
currency notes in India. On the back of the push for #CashlessIndia consequent
to #CurrencySwitch, the Alibaba-backed mobile wallet has increased its lead over
its other mobile wallets (e.g. MobiKwik, PayZapp) and account-to-account money
transfer apps (e.g. UPI). Today, PayTM boasts 150M users (Source: Wikipedia).

Based on my personal experience and anecdotal evidence, I advance five reasons

to explain why PayTM is miles ahead of its rivals.

#1. Ease of Onboarding Merchants

Merchants can sign up for PayTM without a bank account. They can receive
money into their PayTM wallets without a bank account. They can even spend
their wallet balance by shopping at other merchants that accept PayTM
payments. It's only when they want to cash out their money from their PayTM
account that they need a bank account.

As a result, PayTM was / is able to sign up hundreds of thousands of merchants

that don't have bank accounts. These merchants could sign up for PayTM as soon
as they had a compelling need to accept cashless payments i.e. immediately after
the demonetization announcement, start accepting payments and visit banks
later to open their accounts after their PayTM account balances started growing.

Contrast this with competing e-wallets, which insist that merchants link their bank
accounts (or debit cards or credit cards) to their apps right at the time of installing
them. As a result, financially-excluded merchants couldn't sign up for them when
they had a compelling need. PayTM's rivals lost this market to PayTM.

#2. Viral Distribution

When PayPal launched in the late 1990s, it incented existing users to send money
to non users. When users sent money to their friends and family members (that
were not on PayPal), PayPal sent them an email saying “Collect $$ by signing up
for PayPal". This give non-users a far more compelling reason to join PayPal than

5|Page
any direct advertising or PR efforts could have and generated a massive amount
of viral distribution for PayPal.

PayTM has copied this approach. And has probably reaped the rich rewards à
la PayPal.

Surprisingly, PayTM’s competitors haven't followed this approach. They insist that
payments can be made only to people that have already signed up to their e-
wallets. They probably think sending money to a non-user would be tantamount
to putting the cart before the horse. Indeed, it would. But, as I’ve said time and
again, Putting Cart Before Horse Does Work (hyperlink removed to comply with
Finextra Community Rules but this post will appear on top of Google Search
results when searched by the title). PayTM and PayPal get it. Their competitors
don't. Instead, they put their prospective users at the mercy of their respective
banks to gain signups.

To take UPI as an example, to receive payments, you need to have a Virtual

Payment Address (VPA) from your bank. Assuming that you're thorougly sold on
UPI and decide to create your VPN, you'll need to contend with your bank's
systems to actually generate one. This adds a big moving part, which doesn't
always work. Just today, I got an SMS from my bank saying they can't issue new
MMIDs - an integral part of IMPS, the payment rails on which UPI works - for the
next five days. There's no guarantee that you'd still be interested in UPI five days
later.

#3. Feet On Street Approach

In the weeks following #CurrencySwitch, PayTM salespersons made daily rounds

in retail hotspots asking storekeepers if they wanted PayTM.

I’ve seen this personally in my building storefront that’s dotted with tea shops,
fruit stores, cigarette sellers and other micromerchants.

I've also heard more about PayTM's aggressive merchant acquisition drive from a
couple of Uber drivers.  According to this cabbie who accepts PayTM on his
personal name – PayTM is also Uber’s official digital payments partner - PayTM
sales reps ride on their motorbikes up and down a street near Pune Airport where
hundreds of Uber and Ola taxis are parked, asking drivers if they want to sign up
for PayTM. When a driver says yes, the rep connects the driver’s smartphone on
6|Page
his own 4G network using tethered WiFi hotspot, downloads the app, installs and
onboards the driver on PayTM. All this in 5-10 minutes. Without being judgmental
about whether the driver is tech savvy or not. And at no data charges to the
cabbie. This Uber driver is so conversant with PayTM’s merchant acquisition
program that he actually knows the PayTM rep's sales quota (10 merchants a
day)!

In sharp contrast, most competitors of PayTM haven't harnessed the power of

feet-on-street to recruit merchants. Instead, they seem to expect merchants to
sign up in self-service mode. An investor in one of these PayTM competitors
actually said this in a MEDIUM article:

"Merchants should be able to go to an Amazon or Flipkart site or a Croma store

and just buy a terminal at their own cost and link their bank account and start
accepting payments."

Well tried. Even if they’re tech-savvy, crazy busy merchants simply don’t have the
time to shop for terminals and learn how to make them work - especially when
they’re getting pampered by the nation's #1 mobile wallet company!

As a result, most micromerchants I’ve quizzed are not even aware of UPI, BHIM
and other competing e-wallets.

#4. Frictionless Payments

By design or default, the Sign Out link in PayTM’s mobile app is buried deep inside
the app. As a result, many users have never seen it and stay logged into their app
all the time. This means they're able to make a payment without a password or
PIN.

This creates a significant security vulnerability in PayTM. But it also makes

PayTM's CX that much more frictionless, which makes a lot of difference when
people use it many times a day.

Security is a hygiene factor. Convenience trumps security. Everytime. Even in

India.

PayTM has understood and capitalized on this element of consumer behavior. Its
competitors have totally missed it.

7|Page
#5. Miscellaneous

PayTM is very well funded and is able to spend big bucks on advertising as also
absorb losses on virtually every transaction.

PayTM makes every effort to enhance UX. For example, as I’d highlighted
in Hiding Your Secret Sauce, PayTM preloads its wallet on the fly without user
intervention. As a result, users wary of having to topup prepaid mobile wallets
before initiating payments find the PayTM experience superior to that of other
mobile wallets, which bump them off with a message asking them to load enough
money into their wallets first and then reattempt the payment.

With the reasons for PayTM's lead over other e-wallets out of the way, let me
come to its detractors who're predicting that PayTM and other prepaid mobile
wallets will become extinct on the face of growing competition from BHIM, a
government-sponsored m-wallet. While I agree that PayTM's dominance is only a
thing of the present, I think stories of PayTM's demise are grossly exaggerated.

That said, PayTM does face a few headwinds:

 Sustaining relationships with merchants with daily sales of INR 50K+. This
category of merchants includes vegetable vendors and fruit sellers among
others who find its cap (INR 20K per month without KYC, INR 100K per
month with KYC) too low. I know at least two merchants that have bailed
out of PayTM for this reason. (Interestingly, they’ve gone back to cash,
which suggests that PayTM’s competitors couldn’t recruit them either)
 Willingness of PayTM’s Chinese backer to fund the company's cashbacks
and mounting losses.

As they say, past performance is no indication of future success. This maxim is as

true for PayTM as any other company. Only time will tell how long India’s #1
mobile wallet will hold on to the top spot.

Full Disclosure: Other than being a user of PayTM - among other e-wallets - I have
no personal or professional interest in the company.

Article2
8|Page
 With the onset of demonetization in 2016, digital payment has seen quite a surge.
Based on “Fintech in India- Powering mobile payments”, a report by global
advisory KPMG, the augmentation in mobile payments has reached 10M+ in three
years. The troupes in this market are manifold, but currently, three of them are
nip and tuck.

Here are some key facts and milestones around these payment leaders:
Paytm
Paytm is the wunderkind of One97 Communication Ltd. marketed by Vijay
Shekhar Sharma in 2010. Initial functionalities included bill payment for mobile,
DTH service, and online purchase. Since then, Paytm has evolved as a
sophisticated mobile payment application with a recorded 250M+ users in the
mere extent of 8 years and a robust capacity of 5000 transactions per second.

In 2018, Paytm’s glorious stint became the theme of a case study at Harvard
Business School.

Features:

 RBI approved secure e-wallet

 Zero banking charge
 Utilities: Payments bank, ticket booking- flight, train, bus & movie, UPI
Payments, etc.
 Transaction limit: 1L for wallet & 1L+ for UPI bank transfer

Google Pay
Google presented its first digital payment app in 2017 founded on NPCI’s UPI
platform. Originally branded as Tez, the app was later rebranded as Google Pay. It
was an instant hit among the Indian users with 8.5M installations. In a record time
of 40 days, 30M transactions were performed.

9|Page
 According to Sajith Sivanandan (Managing Director & Business Head) at Google
Pay, “The company’s growth has tripled in terms of monthly active users and are
at 67M monthly active users as of September 2019.”

Features

 Available on Android & iOS

 Zero banking charge
 Utilities: UPI payments, Bill payments- phone, DTH service, gas, ticket
booking- train, bus, flight etc.
 Transaction Limit: More than 1L

PhonePe
PhonePe was engendered by former Flipkart employees Sameer Nigam and Rahul
Chari in 2015. In August 2016, PhonePe was the 1st Android app providing UPI
based user services. In 3 months, the app showed a record-breaking download
crossing 10M users. PhonePe also hit the 50M badge on the Google Play store
swiftly.

A bump on the road was encountered in January 2017 with blockage from ICICI
bank and Airtel for violation of NPCI regulations. This resulted in closing operation
on Flipkart as well. This legal feat was however resolved in February 2017.

Features:

Bill Payments, DTH recharge, ticket bookings

 UPI transactions
 Zero banking charge

Transaction limit:10000 for wallet and 1L for UPIAt this stage, it’s impossible to
predict who will the race in digital payments. Based on the Economic Times
Report, Google Pay leads in terms of aggregate transaction values for payment
(Google Pay-55,000Cr, PhonePe-44,000Cr, Paytm-38,200Cr). Paytm however has a
10 | P a g e
higher market share than the competitors. Bloomberg report 2019 states that
PhonePe poses a valid threat with increased 290M transactions. Based on
efficacies and market value, all three seem to be at a deadlock of sorts.

OBJECTIVE OF STUDY

 To Compare the services offered by Paytm with reflect of Google pay and
Phonepe

11 | P a g e
 To study the attributes which makes Paytm more preferable against it’s
competitors.
 To conduct a comparative study of Brand image of Paytm against Google
pay and Phonepe

RESEARCH DESIGN

 Types of research

The research is being conducted here is Exploratory followed by

Conclusive research.

 Exploratory research

Our Exploratory research is divided into 2 parts

I. Secondary Research
II. Focused Group discussion and In-depth interview

 Conclusive research

I. Universe of the study is all the users of e-wallet in country.

II. Population of the study is all students and faculty members of BIT
MESRA.
III. Sample size is 50
IV. Sample design for the research is Probabilistic sampling, under which
we are taking Simple random sampling method.

INSIGHTS FROM FOCUSED GROUP DISCUSSION AND IN-

DEPTH INTERVIEW

 Paytm users can receive money into their PayTM wallets without a bank
account and spend, which makes easier transaction.
 By design or default, the Sign Out link in PayTM’s mobile app is buried deep
inside the app. As a result, many users have never seen it and stay logged
into their app all the time. This means they're able to make a payment
without a password or PIN.

12 | P a g e
 PayTM has understood frictionless payment and capitalized on this element
of consumer behavior. Its competitors have totally missed it
 Paytm has evolved as a sophisticated mobile payment application with a
recorded 250M+ users in the mere extent of 8 years and a robust capacity
of 5000 transactions per second.
 Paytm has more reliable feedback system than others which makes it
consumer friendly.
 Paytm gives more attention toward security of transactions than gpay and
ppay
 Paytm is widely available in country which is the reason it is most preferred.
 Paytm directly links with bill paying authorities, while g pay and p pay use
intermediary, is the reason has trust on Paytm transactions.
 Only Paytm allows more than 1Lakh rupese transaction without opening
any bank account.
 Paytm is widely accepted byandroid while I phone users prefer more gpay
and ppay.

QUESTIONNAIRE

 DEMOGRAPHICS

NAME

GENDER

OCCUPATION

AGE

INCOME

 SECTION A

13 | P a g e
 1. Do you use any E-wallet? YES NO
2. Which E-wallet app you prefer the most?
PAYTM GOOGLE PAY PHONEPAY BHIM OTHERS
3. For how long you are using this app?

<1year 1year 2 years >2years

4. Please put a checkmark in the space to show your opinion about your
E- wallet app

SECURED _ _ _ _ _ _ _ UNSECURED

FRIENDLY _ _ _ _ _ _ _ NOT FRIENDLY

CONVENIENT _ _ _ _ _ _ _ INCONVENIENT

EXPENSIVE _ _ _ _ _ _ _ CHEAPER

UPDATED _ _ _ _ _ _ _ OUTDATED

5. What feature you think makes an E-wallet a good brand to go for?

Rate

SECURITY 1 2 3 4 5 6 7

OFFERS 1 2 3 4 5 6 7

TRANSACTION LIMIT 1 2 3 4 5 6 7

CONVENIENCE 1 2 3 4 5 6 7

ACCEPTANCE 1 2 3 4 5 6 7

6. If you don’t use Paytm , which features you would expect to be

improved in Paytm so that you can switch?

SECURITY

OFFERS

14 | P a g e
 TRANSACTION LIMIT

CONVENIENCE

ACCEPTANCE

I won’t switch at all

15 | P a g e